A:

Featherbedding describes the practice where businesses hire more workers than are necessary to carry out particular tasks. Unions insist on rules against featherbedding to ensure that employees remain employed when a decrease in work or wages is imminent due to external factors, like technological changes and reduced demand. Often, these changes in technology or demand for a company's products or services will cause the company to lay off the extra, or "fluff", employees.

Unions sometimes request that featherbedding rules be added to labor contracts to protect workers from future unemployment. Featherbedding causes tensions between the management body of a company and the union because companies, eager to reduce costs, do not want to pay more than they have to, while unions seek to secure the employment of its members at all costs.

For more on this topic, read Macroeconomic Analysis and Surveying The Employment Report.

This question was answered by Chizoba Morah.

RELATED FAQS
  1. Do businesses in states with right-to-work laws have demonstrably less deadweight ...

    Learn more about the economic impact of right-to-work laws and how unions impact production and purchase levels. Explore ... Read Answer >>
  2. Will a 10-99 form make my taxes higher?

    My employer is not withholding taxes each pay day. Will this increase my taxes because they will give ... Read Answer >>
  3. What is the difference between a state and a federally chartered credit union?

    Learn how federal chartered credit unions are regulated by the NCUA, while state chartered unions are regulated by their ... Read Answer >>
  4. Does the FDIC cover credit unions?

    Learn whether or not the FDIC insures your funds at a credit union, and what types of insurance are available at the different ... Read Answer >>
  5. How can companies reduce internal and external business risk?

    Understand the difference between internal business risk and external business risk. Learn how a company can reduce each ... Read Answer >>
  6. What's the difference between cyclical unemployment and seasonal unemployment?

    Learn about the key differences between cyclical and seasonal unemployment. Read about distinguishing features of each of ... Read Answer >>
Related Articles
  1. Markets

    The Top 5 Most Unionized Industries

    Unions don't have the membership numbers that they once did, but they are still a vital part of several different important industries.
  2. Markets

    Why Wages Stick When The Economy Shifts

    Even economists can't agree on the impact (or even existence) of wage stickiness. So, how does it affect you?
  3. Markets

    Will You See Higher Wages In 2015?

    It's been a few years into the economic recovery from the Great Recession, and the employment picture has been rocky.
  4. Markets

    How Education And Training Affect The Economy

    Education and training benefit not only the worker, but also the employer and the country as a whole.
  5. Personal Finance

    Hiring? Regulations Small Businesses Need to Know

    When a small business becomes an employer, it has new responsibilities. Make sure you familiarize yourself with regulatory requirements.
  6. Markets

    5 Developed Countries without Minimum Wages

    Find out about five developed nations that have no federally regulated minimum wage and how these countries use unions to ensure workers are paid their due.
  7. Markets

    Why New Overtime Rules May Hurt Workers

    Discover why the Obama administration's new overtime rules may end up hurting businesses, slowing economic growth and punishing workers.
  8. Markets

    Minimum Wage Increase: Will Technology Help Margins for U.S. Companies? (MCD, MSFT)

    Discover why the $15 per hour minimum wage movement may unintentionally be sowing the seeds for a new crop of jobs-stealing robots.
  9. Markets

    The Economics Of Labor Mobility

    Loosening labor restrictions has both good and bad effects for a country and its workers.
  10. Personal Finance

    What Are Home-Based Credit Unions?

    They’re a far cry from a traditional bank, but that doesn’t mean you shouldn’t park your money there or get a loan – if one meets your needs.
RELATED TERMS
  1. Featherbedding

    Term used to describe the practice of a labor union requiring ...
  2. Labor Union

    An organization intended to represent the collective interests ...
  3. Organized Labor

    An association of workers united as a single, representative ...
  4. Collective Bargaining

    The process of negotiating the terms of employment between an ...
  5. Taft-Hartley Act

    A Federal law that was enacted in 1947 that prohibited certain ...
  6. Credit Union

    Member-owned financial co-operative. These institutions are created ...
Trading Center